This proposal will explore genetic pathways that specify the commitment of embryonic mesoderm toward hematopoietic fate in model organisms like the fish and mouse, in order to identify mechanisms that can be engineered to drive hematopoietic stem cell differentiation from mouse and human embryonic stem cells. To date, we have succeeded in preliminary efforts to generate hematopoietic stem cells that, when modified by the homeotic selector gene hoxb4, engraft multi-lineage hematopoiesis in irradiated primary and secondary mice. Recent data from anemic zebrafish mutants has identified the cdx4 gene as a central player in specifying hematopoietic mesoderm through activation of hox genes. When expressed in embryonic stem cells, cdx4 stimulates hematopoiesis and in combination with hoxb4 promotes enhanced lymphoid-myeloid engraftment. We will test the hypothesis that cdx4 is an essential gene for specifying hematopoiesis in mouse embryos and embryonic stem cells. We will investigate whether cdx4, hoxb4, and the blood specification factor scl will induce hematopoietic differentiation if delivered by direct protein transduction, effectively testing the hypothesis that these factors act as developmental switches to specify blood fate. We will determine whether the embryonic morphogens Indian Hedgehog, Bone Morphogenetic Protein 4, and Wnt3a will instruct blood development and activate cdx-hox signaling in embryonic stem cells. Ultimately, we will test whether hematopoietic tissues derived from embryonic stem cells, including lines created by therapeutic cloning, parthenogenesis, and somatic cell reprogramming, can be harnessed to correct genetic bone marrow disorders in murine models. These studies will provide an important test of the feasibility of therapeutic applications of embryonic stem cells.